Markets extend the somberness with a mildly weak start

The Indian markets have made a somber start on Thursday morning, tailing the weakness in the regional counterparts and the mixed trading on Wall Street overnight, ahead of US Federal Reserve policy meeting next week. The local traders are keeping their bets low ahead of the state election results due on Saturday, as a victory in Uttar Pradesh is important for the ruling party to shore up its numbers in Rajya Sabha. The exit polls will be out later today after 5.30 pm. The weakness in rupee too was weighing down the equity markets sentiments. The domestic currency snapped its gaining streak in last session and was trading lower in early trade today, as US Fed rate hike in March looks almost certain. The broader markets were showing resilience, while on sectoral front Utilities, healthcare, IT and Power were dragging the markets, some support was coming from realty and consumer durables. The PSU oil marketing companies were trading higher by about half a percent, as the international crude prices slumped overnight to the 2017 lows.

In scrip specific movement Tata Tele was down by over 4% after the Reserve Bank of India (RBI) once again opposed the $1.17 billion settlement between Tata Sons and Japan’s NTT DoCoMo, leaving the fate of the payment to the Delhi High Court.

The BSE Sensex is currently trading at 28855.93, down by 46.01 points or 0.16% after trading in a range of 28815.02 and 28911.54. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were showing mixed trade; the BSE Mid cap index was down by 0.09%, while Small cap index was up by 0.07%.

The top gaining sectoral indices on the BSE were Realty up by 0.49%, Consumer Durables up by 0.40%, Auto up by 0.27%, Consumer Disc up by 0.25% and Industrials up by 0.05%, while Utilities down by 0.98%, Telecom down by 0.63%, Power down by 0.60%, Metal down by 0.58% and Healthcare down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.39%, Tata Motors up by 0.62%, HDFC up by 0.50%, Axis Bank up by 0.47% and Maruti Suzuki up by 0.39%. On the flip side, Dr. Reddy’s Lab down by 4.16%, GAIL India down by 3.77%, Wipro down by 1.24%, Power Grid down by 1.13% and ONGC down by 1.04% were the top losers.

Meanwhile, Indian Credit Rating Agency (ICRA), the domestic rating agency in its latest report has said that the Indian Aviation Industry is likely to report 22 to 23 percent passenger traffic growth in FY17 supported by ongoing low airfare regime. It also said that the airlines are maintaining healthy passenger load factors (PLFs) backed by low airfares. Though, since the aviation turbine fuel (ATF) prices have been on an uptrend during the year, the impact on profitability of the airlines during Q4 FY17 is inevitable, as average ATF prices during the quarter are 37.9 percent higher YoY, while the yields continue to remain under pressure.

ICRA said that the Indian Aviation industry has reported YoY passenger traffic growth of 23.2 percent during 10m FY17 period and the industry is heading towards completing one of the best years in terms of passenger traffic growth. It also said that the domestic passenger growth for last five years stood at 12.9 percent, 5.3 percent, 4.6 percent, 15.5 percent and 22.1 percent and the industry is likely to surpass the last year growth rate, notably on a higher base. According to the report, during the month of January 2017, the domestic passenger traffic growth stood at 25.3 percent. The YoY traffic growth on international routes for the industry was moderate at 8.8 percent; however, the Indian carriers outperformed the industry growth, with 17.8 percent YoY growth in traffic.

As per its estimation, the fuel cost per ASKM (CASK) of the domestic aviation industry increased to Rs 1.16 in January 2017 from a low of Rs 0.82 in February 2016, and the same is expected to increase further in February and March 2017. Further, outstanding order backlog of various Indian airlines underlines healthy future capacity addition. Backed by competitive pricing, the industry reported stellar PLF of 84.4 percent during 10m FY17, which is also one of the best amongst the key markets in the world.

The CNX Nifty is currently trading at 8909.75, down by 14.55 points or 0.16% after trading in a range of 8899.50 and 8918.50. There were 21 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 1.38%, ACC up by 1.08%, Zee Entertainment up by 0.67%, Tata Motors up by 0.57% and Axis Bank up by 0.55%. On the flip side, Dr. Reddy’s Lab down by 4.14%, GAIL India down by 3.94%, Wipro down by 1.55%, Bharti Infratel down by 1.39% and Power Grid down by 1.30% were the top losers.

The Asian markets barring Japanese Nikkei 225 which was trading up by 26.38 points or 0.14% to 19,280.41, were trading in red.

On the other hand, Hang Seng slumped by 233.16 points or 0.98% to 23,549.11, Taiwan Weighted decreased 83.58 points or 0.86% to 9,669.87, Shanghai Composite decreased by 27.51 points or 0.85% to 3,213.16, FTSE Bursa Malaysia KLCI was down by 3.91 points or 0.23% to 1,721.63, KOSPI Index declined by 1.74 points or 0.08% to 2,093.67 and Jakarta Composite was tad lower by 0.82 points or 0.02% to 5,392.94.